EC Commences Market Test of Google’s Commitment Proposals

Today, the European Commission published details of Google’s remedy proposals, marking the beginning of a formal market test.

Over the last several months, a strong consensus has emerged about the minimum standard of remedies that will be required to end the abusive search manipulation practices the Commission has identified. The straightforward and reasonable even-handed principle has already been widely endorsed by Complainants and consumer groups, and, if implemented, would immediately restore the unbiased level playing field that search engine users expect and that competition and innovation require.

As eleven Complainants wrote in an open letter to Commissioner Almunia last month:

“There are two equally important aspects to Google’s search manipulation practices: the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services. Any effective remedies will require explicit commitments to end both aspects; remedying one without remedying the other would simply allow Google to recalibrate the un-remedied practice in order to achieve the same or equivalent anti-competitive effect.

Google’s strict adherence to the following overarching principle would ensure an end to both aspects of Google’s search manipulation practices:

Google must be even-handed. It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.”

The even-handed principle has also been endorsed by BEUC, the European consumer organisation representing the views of 39 national consumer organisations from across 30 European countries.

Remedies that implement the even-handed principle would, by definition, prohibit Google’s abusive search manipulation practices. They would be straightforward to define, implement, and monitor (for examples, see here and here), and would start acting to restore competition from the moment Google committed to them.

We will withhold final judgement on Google’s proposals until we have had time to analyse them in detail, but we and others will be looking to see how they measure up to the even-handed principle standard. The early signs are that Google’s proposals will fall far short of this minimum requirement.

Instead of promising to end its abusive practices, Google’s proposal seems to offer a half-hearted attempt to dilute their anti-competitive effects, by labelling Google’s own services and throwing in some token links to competitors’ services alongside them. Without robust guidelines that guarantee the placement, depth, prominence, and relevance of these links, and guarantee that the selection of competitors will be free from anti-competitive penalties and discrimination, neither measure will make a dent in Google’s ability to hijack the traffic and revenues of its rivals.

It is difficult to imagine a Competition case where the stakes for consumers and businesses could be any higher. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of us discover, read, use, and purchase online. The importance of ending Google’s ability to manipulate this unprecedented power to its own anti-competitive ends cannot be overstated. It is no stretch to say that the hopes of a digital-led economic recovery may depend on the outcome of this case.